Prime Minister Nguyen Tan Dung has allowed the Vietnam Shipbuilding Industry Group (Vinashin) to borrow  from the Vietnam Development Bank to pay salary to its employees.

Subsidiaries under Vinashin and Vinashin’s firms which were handed over to the Vietnam Shipping Lines Corporation (Vinalines) and owe their employees salary and social, health, unemployment insurance, etc. are permitted to borrow capital from the Vietnam Development Bank at the interest rate of zero percent, for one year to pay the debts in 2010 and 2011.

The firms are also permitted to borrow capital from the National Fund for Employment to create jobs and provide vocational training to their workers, who lost jobs in 2010 and 2011,.

Earlier, the government extended the deadlines for Vinashin to pay import tax and value added tax on input materials and equipment imported to serve canceled shipbuilding contracts until December 31, 2012.

According to Vinashin, by June 2010, it had 289 subsidiaries, totaling 49,454 employees. Vinashin currently owes salary and social welfares worth more than VND100 billion ($50 million).

In related news, Vinashin has completed the construction of 38 ships ahead of schedule, seven more than targeted, just two months after it underwent a major restructuring.

This marked a significant increase in productivity compared to the 22 ships it produced in the first eight months of the year, worth US$241 million.

Vinashin is expected to complete four more ships by the end of 2010.

The group will have completed the construction of 64 vessels by the end of this year, 28 for export worth $278 million, and 36 for domestic partners, worth $299 million.

Besides the restructuring, under the commitments made to the Government, Vinashin has to maintain trading and production activities to ensure job stability and workers’ salaries.

Vinashin said that over the past two months, 6,500 employees had worked to complete the ships.

The Vinashin restructuring is aimed at cutting debt and restoring and developing the troubled shipbuilding group. It implemented a plan to re-organize its 216 companies after receiving the approval from the Prime Minister on December 7.

PV